Columbia Office Market Poised for Rebound

Market Summary 

The Columbia office market continued to gain a slight momentum during the first quarter of 2005. Although market activity is on the upswing, the absorption of space is taking place despite the absence of strong job creation in the Columbia area in the non-manufacturing area when compared to the pace of job creation on a national level. Restrained new construction is now providing a window for absorption to bring the market back to healthier times. Overall occupancies improved from 78.1 % as of mid-year 2004, to 81.1 % at year-end 2004 and 81 .4% at the end of the first quarter of 2005. Class A properties are performing the best, with an 85.8% occupancy rate. 

Total employment growth in Columbia experienced a downturn post- 9/ I I, but is now seeing positive job growth. The manufacturing sector in Columbia has experienced a history of negative job growth, but beginning in 4Q 2003 this sector began adding jobs, showing that local economy is well on its way to recovery.

The suburban markets in Columbia appear to be experiencing the bulk of the activity thus far this year. As of December 31, 2004, occupancies in the suburban market improved to 76.5%, up from 73.6% at year-end 2003 with further absorption allowing the market to reach 74.7% as of March 30, 2005. Suburban Class A occupancy was 77.9% at year-end 2004 and 78.1 % as of March 30, 2005. This low occupancy level was a result of newly constructed office buildings in the market still in their initial lease-up period.

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